Pashas prospects

Just when one thought the dust has finally settled over the next Finance Minister, reports are now emerging that the issue is far from over.
Even after a meeting with Prime Minster Gilani last Tuesday, sources in the capital reveal that Nasim Beg, a capital market pundit, is not the only one in the reckoning for the job - something that can potentially jolt the confidence of equity investors a great deal.
Dr. Hafeez Pasha, who was nearly ruled out from the race is now back among the probables with a stronger backing than many perceive. Pasha, a development economist, is believed to have the support of the Prime Minister along with that of Pakistans lender of the last resort - the IMF.
While Beg seems to be fast losing his supporters with the only visible helping hand coming from the presidency, a nod from the Fund may work well for Pasha as the country is still under its programme.
Who is best suited to run the economic affairs of Pakistan in such distressful times is one mighty tricky question. It is essentially not a matter of individuals but their respective backgrounds and their expertise that hold the key to this decision.
Keeping Tarin as an exception for his tremendous achievements in successfully settling the 7th NFC Award and his emphasis on real sector growth, the banker-led finance ministry has failed to serve Pakistan economy at large.
The fact that Nasim Beg is an investment banker can push Pakistan back to the days of the Shaukat Aziz era, when the economy was propped up by service-based, consumption-led, import dependent growth with little emphasis on real sector development.
A repeat of that episode is something Pakistan can afford at this point in time. Pasha, on the other hand is a renowned development economist, which is exactly what is needed to put the countrys economy back on the right track.
Dr. Pasha has vast experience in policy making. He has served as the head of the Planning Commission and led a number of ministries, including the all important portfolio of finance.
This implies that he has had better hands-on understanding of how to deal with politicians - an experience which Beg, and for that matter even Tarin, have not enjoyed.
Evidence from other developing economies is also in favour of Pasha. Economists credited with reviving economic policy in other countries include the likes of Manmohan Singh of India and Lula De Silva of Brazil. Both men, in recent history, are credited with bringing their respective economies on the world stage.
Who will eventually make it to the office is too early to say. But it will be interesting to see how the capital markets will respond to this new twist in the appointment saga.
Clearly, the political ramifications of this difference of opinion between the premier and the president could be significant for the stakeholders.
Is the Prime Minister finally taking a stand on the executive responsibilities that he rightly deserves? Will the appointment of Dr Pasha, who is known to be a candidate preferred by the opposing political party PML N, foretell future political leanings of the current government? How will the presidents office respond to PM Gilanis move, especially in the light of constitutional reforms recently finalized by the parliamentary committee?
These are just some of the ramblings on the minds at present - enough to create another round of anxiety across the markets.